The financial regulators in the Philippines have signed an agreement to streamline bank merger, consolidation, and acquisition (MCA) processes.

The agreement was signed by the officials of Bangko Sentral ng Pilipinas, Philippine Deposit Insurance Corporation, Securities and Exchange Commission, Cooperative Development Authority, and the Philippine Competition Commission in a virtual ceremony.

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The move, initiated by the Philippine Deposit Insurance Corporation, seeks to harmonise the requirements and expedite MCA processes in the banking sector.

According to a statement, this will reduce documentary requirements from 58 to only 30 as well as eliminate duplicate functions among the concerned agencies.

The regulators expect that it will significantly reduce the total processing time of MCA proposals to around 55 business days from the current average of about 160.

The step is aligned with the Philippine government’s ease of doing business programme.

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“The Implementing Guidelines on the procedures for MCA applications will subsequently be issued via a Joint Circular by the partner-agencies,” the statement said.

Notably, the Philippines’ banking industry has more than 500 banks, a majority of which are rural lenders. However, half of country’s population does not use a bank, reported Reuters.

The regulators have been encouraging consolidation in the industry for several years to strengthen the sector.

Philippine Competition Commission head Arsenio Balisacan was quoted by the news agency as saying: “We acknowledge that mergers, consolidations and acquisitions can catalyse innovation in any industry, including banking, because of combined resources and expertise.”

Earlier this year, the central bank of the Philippines decided to stop accepting digital banking licence applications for three years. The move was taken to monitor the performance of the industry.